NeuroPace(US:NPCE)2025-11-04 21:22Financial Performance - Revenue increased by $6.3 million, or 30%, to $27.4 million for the three months ended September 30, 2025, compared to $21.1 million for the same period in 2024[158]. - Revenue for the nine months ended September 30, 2025, increased by $15.0 million, or 26%, to $73.4 million compared to $58.4 million for the same period in 2024[167]. - Gross profit rose by $5.7 million, or 37%, to $21.2 million for the three months ended September 30, 2025, with a gross margin increase from 73.2% to 77.4%[159]. - Gross margin improved from 73.4% for the nine months ended September 30, 2024, to 77.2% for the same period in 2025[168]. - Net loss decreased by $1.96 million, or 36%, to $3.5 million for the three months ended September 30, 2025, compared to a net loss of $5.5 million for the same period in 2024[157]. Expenses - Sales and marketing expenses increased by $2.7 million, or 27%, to $12.6 million for the three months ended September 30, 2025, primarily due to personnel-related costs[160]. - Research and development expenses rose by $0.8 million, or 14%, to $6.6 million for the three months ended September 30, 2025, mainly due to personnel-related expenses[161]. - General and administrative expenses increased by $0.6 million, or 15%, to $4.6 million for the three months ended September 30, 2025, attributed to personnel-related costs[162]. - Total operating expenses for the nine months ended September 30, 2025, increased by $10.3 million, or 17%, to $71.2 million compared to $60.9 million for the same period in 2024[166]. Cash Flow and Financing - As of September 30, 2025, the company reported an accumulated deficit of $549.7 million and cash, cash equivalents, and short-term investments of $60.0 million[131]. - Net cash used in operating activities was $11.5 million for the nine months ended September 30, 2025, primarily due to a net loss of $18.7 million[192]. - Net cash provided by financing activities was $19.0 million for the nine months ended September 30, 2025, mainly from a follow-on offering of common stock and proceeds from the MidCap Term Loan[195]. - The company anticipates that its cash resources will fund operating expenses for at least twelve months from the issuance of its financial statements[188]. - Cash, cash equivalents, and short-term investments amounted to $60.0 million as of September 30, 2025, up from $52.8 million at December 31, 2024[203]. Loans and Debt - The CRG Term Loan had an interest rate of 13.5% per annum, with a PIK option elected for interest payments from March 2023 through June 2024[178]. - The MidCap Term Loan was established in June 2025, borrowing $60.0 million, with a revolving credit facility of up to $15.0 million, which has not been drawn upon as of September 30, 2025[181]. - Future minimum payments for the MidCap Term Loan total $89.6 million, with $6.1 million due within the next twelve months[185]. - The exit fee for the CRG Term Loan was reduced from 10% to 8% upon repayment in June 2025[180]. Product Development and Regulatory Affairs - The RNS System demonstrated a 62.5% median seizure reduction at six months and an 82.0% median seizure reduction at 36 months post-implant in drug-resistant focal epilepsy patients[127]. - The RNS System is currently indicated for adult patients with drug-resistant focal epilepsy, with ongoing studies to expand indications to younger patients[127][128]. - The company is actively engaging with the FDA to finalize a pathway for expanded indications for the RNS System by the end of 2025[128]. - The company plans to continue significant investments in research and development, clinical studies, and regulatory affairs to support ongoing and future regulatory submissions[132]. - The company expects to incur continued expenditures for commercialization efforts and investments in clinical studies and new product development[186]. Strategic Initiatives - The exclusive distribution agreement with DIXI Medical expired on September 30, 2025, and the company is in a wind-down period to sell remaining inventory[134]. - The company has initiated a pilot program to expand outreach to Level 4 comprehensive epilepsy centers in 2024 and is expanding these efforts through 2025[130]. - The company expects to continue incurring net losses and negative cash flows in the near term, potentially requiring additional funding[132]. - The gross margin is expected to improve as production volume increases, spreading fixed manufacturing costs over more units[150].